5 Best Warehouse and Self-Storage Stocks to Buy

3. Public Storage (NYSE:PSA)

Number of Hedge Fund Holders: 33

Public Storage (NYSE:PSA) is a self-storage REIT headquartered in Glendale, California, United States. The firm has tens of millions of square feet of rentable property across the United States and other countries.

Public Storage (NYSE:PSA) is one of the strongest players in its industry, as it has invested $7.4 billion in acquisitions since 2019. These have yielded 3.5% and 5.2% in 2020 and 2021, respectively. The firm also has an industry leading same store NOI margin of 78.8%, and its 21x share price to FFO ratio indicates strong market confidence. Public Storage (NYSE:PSA) pays a $2 dividend for a 2.2% yield.

Raymond James increased Public Storage (NYSE:PSA)’s share price target to $380 from $365 in August 2022, highlighting that the firm’s strong balance sheet makes it a great inflation play. 33 of the 895 hedge fund portfolios studied by Insider Monkey for this year’s second quarter had invested in the company.

Public Storage (NYSE:PSA)’s largest investor is Cliff Asness’s AQR Capital Management which owns 632,696 shares that are worth $196 million.

“Public Storage is the largest self-storage REITs. The company acquires and develops self-storage facilities and currently owns or manages over 2,7000 properties and is extremely well diversified across the United States. The company was founded in 1972 and IPO-ed in 1980. We have long admired the company’s ability to grow and maintain high occupancy. We purchased our position after a recent pullback in the company’s share price. We also hold a small position in Extra Space Storage Inc., for the same reasons.

The business is largely recession proof with predictable revenues that grow every year due to rent increases, operating efficiencies and new sites. Typical reasons for using a self-storage facility include deaths, divorces, downsizing as well as birth and marriages – things that happen all the time, regardless of the economy. The company can continue to grow through consolidation as the self-storage market is still dominated by mom-n-pop operators. By acquiring underperforming assets and improving operations the company creates incremental shareholder value.